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2.2 ERMUSR 01-14-2020ELK RIVER MUNICIPAL UTILITIES SPECIAL MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM December 17, 2019 Members Present: Chair John Dietz, Vice Chair Al Nadeau, Commissioners Paul Bell, Mary Stewart, and Matt Westgaard ERMU Staff Present: Troy Adams, General Manager Theresa Slominski, Administrations Director Tom Geiser, Electric Superintendent Dave Ninow, Water Superintendent Tom Sagstetter, Conservation & Key Accounts Manager Michelle Canterbury, Executive Administrative Manager Jennie Nelson, Customer Service Manager Tony Mauren, Communications & Administrative Coordinator Scott Thoreson, Lead Lineworker Others Present: Cal Portner, City Administrator; and Peter Beck, Attorney 1.0 GOVERNANCE 1.1 Call Meeting to Order The special meeting of the Utilities Commission was called to order at 3:30 p.m. by Chair Dietz. 1.2 Pledge of Allegiance The Pledge of Allegiance was recited. 1.3 Consider the Agenda Chair Dietz stated that he would like to add one item that requires a short discussion to 6.3 Other Business. Moved by Commissioner Westgaard and seconded by Commissioner Bell to approve the amended December 17, 2019, agenda. Motion carried 5-0. 1.4 Recognition of Employee Achievements Mr. Adams announced that Mr. Sagstetter and Ms. Nelson recently graduated from the Minnesota Municipal Utilities Association (MMUA) Leadership Academy. Mr. Adams Elk River Municipal Utilities Commission Meeting Minutes December 17, 2019 Page 1 29 provided some background on the leadership program and how it was developed. Mr. Adams asked the two graduates to share some highlights of the program and the impact it has had on them. Mr. Sagstetter stated it was a great program, and shared some details about the curriculum and his key takeaways. Ms. Nelson shared that the instructor was awesome, and was really good at getting participants to step out of their comfort zone and dig deep within themselves. Ms. Nelson also shared an inspirational story about everyday leadership and the difference it can make. The Commission congratulated the employees on their achievement. 2.0 CONSENT AGENDA (Approved By One Motion) Moved by Commissioner Nadeau and seconded by Commissioner Stewart to approve the Consent Agenda as follows: 2.1 November 2019 Check Register 2.2 November 12, 2019 Regular Meeting Minutes 2.3 November 18, 2019 Special Joint City Council Meeting Minutes 2.4 2020 Official Depository 2.5 2020 Official Newspaper 2.6 2020 Utilities Meeting Schedule Motion carried 5-0. 3.0 OPEN FORUM No one appeared for open forum. 4.0 POLICY & COMPLIANCE 4.1 Policy Manual Initiative Mr. Adams shared that, per the initiative schedule, the items for consideration in December are from the Electric and Water sections. These sections contain 29 policy documents with action requests for consideration. As outlined in the initiative overview, there are 13 policy documents in the Electric and Water sections which are proposed to be eliminated and/or removed from the ERMU Policy Manual. There are seven policy documents in the Electric and Water sections which are proposed to be moved and incorporated into the Governance sectio direct authority over these documents as they will become part of the Commission Policy Manual. Elk River Municipal Utilities Commission Meeting Minutes December 17, 2019 Page 2 30 There are nine policy documents in the Electric and Water sections which are proposed to be moved to the Management Policy Manual. This action would delegate the authority over these policies to management. Mr. Adams reached out to the Commission to see if there were any questions. There were none. Moved by Commissioner Bell and seconded by Commissioner Nadeau to approve the following: Remove the following policies from the ERMU Policy Manual: E.6a, E.7, E.7a, E12, E.12a, E.12b, W.6a, W.6b, W.6c, W.8, W.8a, W.9a, and W10. Move the following policies to the Commission Policy Manual: E.5, E.6, E.10, W.5, W.6, W.7, and W.9. Delegate authority to management and move the following policies to the Management Policy Manual: E.2, E.3, E.4, E.8, E.9, E.11, W.2, W.3, and W.4. Motion carried 5-0. 4.2 2020 Governance Agenda Mr. Adams presented the proposed 2020 Annual Governance Agenda. Mr. Adams explained that the annual agenda will provide transparency for the occurrence of the most critical responsibilities of the Commission. In an effort to balance out the monthly recurring governance functions, Commissioner Stewart suggested the Annual Commissioner Orientation and Review of Governance Responsibilities and Roles be moved to March. Staff stated they would make that change. Moved by Commissioner Westgaard and seconded by Commissioner Stewart to adopt the 2020 Governance Agenda with the suggested change. Motion carried 5-0. 4.3 Performance Metrics and Incentive Compensation Policy Per ERMU policy, the metrics for measurement of the designated year needs to be determined before the start of the designated year; this allows for changes to be made and communicated in a timely manner before performance measurement begins. Mr. Adams shared that based on the challenges of collecting sufficient survey data, staff is recommending that the Customer Satisfaction survey component of the Utilities Performance Metrics and Incentive Compensation (UPMIC) be removed from the score card prior to the 2020 measurement period, and the 5 point weight be reallocated to another component. Commissioner Stewart suggested the Customer Satisfaction survey component be replaced with a component relating to the Clean Energy Choice Program and the level of Elk River Municipal Utilities Commission Meeting Minutes December 17, 2019 Page 3 31 customer participation. There was discussion on the most optimal way to measure the results and it was decided that a number versus a percentage would be best. After further discussion, the Commission had consensus to replace the Customer Service Satisfaction component with the Clean Energy Choice Program Participation, with a weight of 5 percent, and a goal of 15 new customers for the 2020 measurement period. Moved by Commissioner Bell and seconded by Commissioner Nadeau to approve the 2020 Performance Metrics and Incentive Compensation Score Card with the Customer Satisfaction component being replaced with the Clean Energy Choice Program Participation, with a weight 5 percent, and a goal of 15 new customers in 2020. Motion carried 5-0. 5.0 BUSINESS ACTION 5.1 Financial Report October 2019 Ms. Slominski presented the October 2019 financial report. Chair Dietz had a few questions. Staff responded. Moved by Commissioner Nadeau and seconded by Commissioner Stewart to receive the October 2019 Financial Report. Motion carried 5-0. 5.2 Gary Street Water Tower Rehabilitation Bids The Gary Street Water Tower Rehabilitation Project was noticed for formal bids. The bid opening was on December 9, 2019 at 1:00 p.m.; nine bids were received. Mr. Ninow presented the bid tabulation. Staff and Short Elliott Hendrickson, Inc. (SEH) recommended awarding the bid to the lowest bidder, Elevation Coating, LLC for the bid amount of $267,900.00. Chair Dietz asked if we have worked with Elevation Coating before and how long the rehabilitation would take. Mr. Ninow responded that this is our first time working with them and that the project should take about seven weeks. Moved by Commissioner Bell and seconded by Commissioner Westgaard to award the contract for rehabilitation of the Gary Street Water Tower to Elevation Coating, LLC for the bid amount of $267,900.00. Motion carried 5-0. 5.3 2020 Annual Business Plan: Budget and Schedule of Rates & Fees In November, the preliminary 2020 Annual Business Plan was presented to the Commission. Ms. Slominski shared that there have been some changes due to the finalizing of projects and expenses, and some cuts from previously presented items. She noted that as previously presented, staff is proposing a 0% electric rate increase, and for st the water ratesn a 2% increase to the 1 tier and basic monthly charge. Elk River Municipal Utilities Commission Meeting Minutes December 17, 2019 Page 4 32 Ms. Slominski presented the proposed Electric Budget and walked through the notable items. For the Landfill Gas Plant line item, Chair Dietz questioned if it made financial sense to replace three engines as the contract will soon be coming to an end. Staff responded that based on the market for the power, it makes sense to do so. There was discussion. Ms. Slominski presented the proposed Water Budget and walked through the notable items. She shared that the addition of a water operator to help with the backflow prevention inspections was an addition to the budget since it was last presented. Mr. Adams elaborated on the potential personnel add, and noted that once we determine what our needs are, and the duties for the position, it would be vetted through the Wage & Benefits Committee and a recommendation would be made to the Commission. There was discussion. Ms. Slominski presented the proposed Travel and Training Budget, and the Dues, Subscriptions, and Fees Budget as outlined in her memo. The Commission had a few questions. Staff responded. There was discussion on the future implementation of advanced metering infrastructure (AMI) and the timing and costs associated with it. Ms. Slominski also shared a list of items that were cut from the 2020 budget in order to meet the margins for the electric department, per bond covenants. It was noted that, should margins prove sufficient as the year progresses, some of the items could have the potential be added back in. Commissioner Stewart thanked Ms. Slominski and Ms. Karpinski for the making changes to the budget presentation. She commented that it was much easier to analyze with the consistency in presentation. Commissioner Stewart offered two additional suggestions to the presentation which staff made note of. Moved by Commissioner Stewart and seconded by Com m issioner Westgaard to adopt the 2020 Annual Business Plan. Motion carried 5-0. 6.0 BUSINESS DISCUSSION 6.1 Staff Updates At the November 12, 2019 Commission meeting, the Wage & Benefits Committee (W&BC) had proposed offering four hours of paid time off annually, per employee, for approved volunteerism. The Commission approved the concept as presented, contingent upon legal review. Ms. Slominski reported that after legal review, Attorney Beck concluded that we Mr. Geiser shared that we had another lineworker give notice. Elk River Municipal Utilities Commission Meeting Minutes December 17, 2019 Page 5 33 Ms. Canterbury expressed her enthusiasm on the 0% electric increase for 2020, and shared that staff will be publicizing this in a variety of ways. Relating to the rates and the rate sheets that had just been adopted, Commissioner Stewart commented on some language that staff may want to consider revising and/or eliminating on the Commercial All Electric Ground Source Heat Pump Service Rate Sheet, and the Energy Management Program Rates Sheet. Staff made note of the suggested changes. Mr. Adams provided an overview of the topics discussed at his fourth quarter meeting with the President/CEO of Connexus Energy. 6.2 Future Planning Chair Dietz announced the following: a. Regular Commission Meeting January 14, 2019 b. 2019 Governance Agenda 6.3 Other Business Chair Dietz shared that it has come to his attention that there is a morale issue within the company, in particular a feeling of divide between the lineworkers and the rest of the company. Chair Dietz shared his opinion on what may be the cause of the problem. He directed management to further discuss this and come back to the Commission with some possible solutions on what can be done to help bridge the gap. 7.0 ADJOURN REGULAR MEETING Moved by Commissioner Nadeau and seconded by Commissioner Bell to adjourn the special meeting of the Elk River Municipal Utilities Commission at 4:30 p.m. Motion carried 5-0. Minutes prepared by Michelle Canterbury. ___________________________________ John J. Dietz, ERMU Commission Chair ___________________________________ Tina Allard, City Clerk Elk River Municipal Utilities Commission Meeting Minutes December 17, 2019 Page 6 34